Not so long ago, disney (NYSE:SAY) dropped a bombshell, which effectively boosted the narrative of the best gig economy stocks to buy. According to a CNBC report, reappointed Disney CEO Bob Iger called for hybrid employees to be expected to come into the office four days a week in March. Later, Starbucks (NASDAQ:SBUX) announced that its corporate employees must also report to the office three days a week.
Frankly, this development smelt of inevitability. While worker bees claimed they were more productive at home than in the office, big bosses can see through the BS. It’s as if men self-declared their height or women their weight: these are not credible statistics. With companies no longer playing ball, investors should consider the best gig economy stocks to buy.
Let’s also be realistic about another reality: most telecommuters prefer to work from home (probably because many don’t actually work). In the ensuing conflict between workers and management, the latter almost always wins. Therefore, it’s time to get cynical and consider the best stocks below from the gig economy to buy.
Alphabet (GOOG, GOOGL)
Going out on your own as a freelancer can be difficult. It might even be more difficult to quit your job because the company has requested a return to normal policy; you know, the original contract that the job seeker and the employer agreed to before the coronavirus. Whatever the circumstances, gig workers (i.e. independent contractors) will find Alphabet (NASDAQ:GOOGNASDAQ:GOOGL) and its absolutely critical ecosystem.
It’s not just that Google dominates the search engine market and, by logical deduction, the Internet. Don’t get me wrong, that’s an important part of the story. Whether as a worker bee in search of greener pastures or as a gig worker in search of new contracts, Alphabet is indispensable. However, it’s also that many companies that “outsource” work need freelancers to use Google’s business architecture for content sharing purposes.
Additionally, Google’s ownership of YouTube and its AdSense protocol allow virtually anyone to monetize their independent content. While Alphabet isn’t directly one of the best stocks in the gig economy to buy, its overriding relevance is worth considering.
An appropriate investment in arguably most circumstances, Microsoft (NASDAQ:MSFT) ranks highly among the best stocks in the gig economy to buy. Basically, it’s because Microsoft owns the business ecosystem. Of course we can talk about Apple (NASDAQ:AAPL) dominating the mobile consumer market with its i-Whatever products. But for commercial purposes, Microsoft is the only one.
Looking at the global desktop operating system segment, Microsoft Windows dominates with over 75% market share. Until that equation changes in favor of other operating systems, the logical deduction rings clear: as a freelancer, you must master Microsoft’s ecosystem or risk being overlooked. It’s not that you can’t use Apple, but you have to know Microsoft.
Basically, this should reinforce Microsoft’s pivot to software as a service (SaaS). Frankly, it’s just easier for freelancers to have access to business apps like Word and Excel. Again, you can use competing platforms. However, Microsoft has long offered professional suite software. It won’t easily lose its dominance, making MSFT one of the best stocks in the gig economy to buy.
At first glance software specialist Adobe (NASDAQ:ADBE) does not appear to justify its inclusion among the gig economy’s best stocks to buy. In the previous year, for example, ADBE sold almost 33% of equity value. And if we’re being frank, Adobe’s products seem to be limited in nature. For example, it is perhaps best known for Photoshop, which is not necessarily a universal commercial program.
Not justifying ADBE with a whataboutism, but the ticker isn’t the only one with poor year-over-year performance. Alphabet and Microsoft above are suffering double-digit losses during the mentioned period. However, Adobe’s fundamental relevance might make ADBE a relative discount, which brings me to my second point. Even before the Covid-19 pandemic changed the working environment, some sources recognized the potential for creatives to find opportunities in the gig economy. Even with declining ad spend in 2022 amid tighter budgets, independents can undermine competition at the enterprise level. And that would be a match made in heaven. Therefore, ADBE is worth considering for the best gig economy stocks to buy.
H&R Block (HRB)
Among the best stocks in the gig economy to buy, tax preparation service provider H&R block (NYSE:HRD) is an undisputed chart winner. Over the past year, HRB shares have rebounded significantly to over 70%. This performance surpasses so many other large companies. Of course, there is inherent risk in pursuing strong players, especially in this market.
I understand the hesitation. Still, if you’re a potential investor, think of it this way. Over the past six months, HRB has gained just over 1%. From August 18 through the January 13 close, the HRB fell almost 22%. However, the underlying fundamentals bolster confidence that HRB truly ranks among the best stocks in the gig economy to buy. Let’s face the facts. If you are filing a standard W-2 form, in most cases several tax filing companies offer free filing services. Why free? Because it’s easy to do.
However, when newly minted workers fill out their 1099 forms, things suddenly stop being free. Taxes for gig workers are more complex. H&R Block can help, bolstering HRB stock.
Of course, raising Uber (NYSE:UBER) as one of the best stocks in the gig economy to buy presents a tricky conundrum. Indeed, Uber pioneered the ride-sharing concept, disrupting the traditional taxi business. And disruption is one of the characteristics of the gig economy. However, Uber has also generated a lot of controversy, especially when it comes to the debate between employees and independent contractors.
Additionally, debates have erupted recently about drivers demanding higher wages amid rising costs for everyone. Basically, Uber faces a complicated situation. At the same time, the company always provides opportunities for those who want to earn extra money. Additionally, with the ride-hailing specialist expanding its Uber Eats food delivery service over the years, it is well positioned to become a utility service provider that goes beyond the transportation component.
Naturally, questions will arise regarding Uber’s financial profile which honestly stinks as of now. However, due to the relevances and dominance of the Uber brand, tax viability could eventually happen.
Vagabond (NASDAQ:ROVR) may not be suitable for everyone. Over the past year, ROVR has fallen by 42% in equity value. According to data from Google Finance, the lifetime return of ROVR is over 65% under parity. Obviously, the underlying business needs time for its business narrative to blossom. However, that moment may soon come.
Here is the first part of the equation. Americans love their pets. So much so, in fact, that the American Pet Products Association revealed that in 2021 the pet industry had total revenue of $123.6 billion, a record year. Therefore, Rover, which connects dog owners with pet service providers, is doing business in a highly relevant market. The other factor benefiting ROVR stocks is the aforementioned return-to-office policies that companies are now requiring. Suddenly the work-from-home guys can’t take care of their furry friends on their own. As a result, Rover can benefit from a large spike in demand, making it one of the best stocks in the gig economy to buy.
Upward Work (UPWK)
Even though Upwork (NASDAQ:UPWK) represents one of the direct plays among the best stocks in the gig economy to buy, it’s also one of the riskiest. Over the past year, UPWK has fallen over 52% in equity value. In terms of lifetime performance, UPWK is down 40%. Still, he is definitely on the road to recovery. For the year so far, shares have gained a remarkable 17%.
An online marketplace that connects freelancers with entities seeking workers for typically short-term projects, Upwork is set to gain more support as people have the choice of either returning to the office as the ‘many companies are demanding, either get into the gig economy. While Upwork carries both technical and financial risks, Wall Street analysts really like UPWK. Currently, out of a total of nine experts, eight rate UPWK as a buy. The outlier rates it as a hold, resulting in a strong consensus buy opinion. Moreover, the average price target of $19.44 implies an upside potential of over 54% as of the time of writing.
As of the date of publication, Josh Enomoto had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.